Setting up your estate plan (i.e. wills, trusts, and powers of attorneys) is a smart step to prepare for unexpected life events in the future. It is especially important for families with minor children. When parents are preparing their estate plans to provide for their children they must keep in mind the following: 1) naming a guardian or co-guardian; and 2) determining an appropriate age in which their children should inherit the estate.
A guardianship is a legal relationship created when a person is assigned by a court to care for a minor child or incompetent adult. The guardian is the person legally responsible for the care of the person who is unable to manage their affairs. The will allows parents to express their wishes as to whom they would like to care for their children if they die. Typically parents will name family members or friends in their wills to act as guardians for their children. Naming a person as guardian in a will does not guarantee that person will be appointed as a guardian. The Circuit Courts in Illinois appoint guardians. However, a court will favor the nomination of a guardian from a will if that person is qualified and competent to act as a guardian. If parents fail to name a guardian in their will, they run the risk of someone whom they do not want to care for their children being appointed guardian by a Court. Nominating a guardian in a will allows parents to express their wishes with regard to the care of their children.
When drafting a will, it is very important for parents to designate a specific age in which their children should inherit the family estate. The result of failing to designate an age may result in children inheriting their parents’ estate at the age of 18. In my experience, I have found that most parents feel their children are not prepared to manage a large amount of money at that age. Certainly if I were to have inherited a large sum of money at that age, I am not sure I would have been mature enough to manage the inheritance responsibly.
In addition to designating a specific age of inheritance, parents should also name a trustee to manage the estate on behalf of their children. The trustee can be the same person or persons that have been named guardians in the will. The trustee’s job is to manage the assets of an estate until the beneficiary children come of age pursuant to the directions in the will. Typically the trustee has discretion to pay out some or all of the estate funds to the beneficiary children early for purpose of education, healthcare or support needs if necessary. At the point when the beneficiary children come of age, the trustee shall pay out the estate assets to said child.
Being a parent means caring for your children in an unknown future. Naming guardians and trustees in a will and designating an age in which children can inherit assets are important ways for a parent to care for their children. Please feel free to contact me if you would like to discuss this topic further or if you have any additional questions about estate planning.
This article provides insights from Marlon T. Suskin, who is a local Libertyville Attorney at Law specializing in Estate Planning in Cook County and Lake County, IL.